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Transitioning Finance to the Cloud - how data can drive your transformation

Flexible, on demand and auto-scaling, the business case for cloud transformation should be clear. But before financial services firms can take advantage of its ability to deliver better business insights faster, there is a fundamental challenge to overcome. How to successfully manage the transition to cloud technology and away from a legacy estate of applications without compromising Finance’s ability to deliver its core role.

What would a Finance function designed from scratch to meet the needs of today’s organisation look like? The advances in digital and cloud in the past ten years alone mean that it may look very different from the structure organisations currently have.

But there’s no getting away from the fact that, at its very core, Finance needs to continue to improve its primary role. It needs to be agile, to more efficiently adapt to changing regulatory reporting requirements. But it also needs to partner and align with the rest of the business to help drive the decisions that will create sustainable revenue growth, manage operational effectiveness, and increase profitability. Cloud-based transformation may be fundamental, but so is the importance of getting it right.

Journey on to the Cloud

To remain relevant, finance needs to fully embrace technology and all its possibilities. That starts with recognising the inherent value of the organisation's data and investing in improving its quality. Cloud-based ERP, EPM, and specialist finance systems (such as Pricing, Underwriting, Actuarial) are already streamlining the flow of data, simplifying workflows and improving insight for a broader base of consumers. The journey to the cloud is inextricably linked and underpinned by data and its relentless growth. Unsurprisingly, this has led to huge innovations in data exploitation in distinct new waves from Advanced Analytics, Big Data, Machine Learning, Artificial Intelligence and, to the more recent ‘Edge’ - extensions of the cloud deployable to local contexts.

Across Financial Services organisations, it generally takes the average Finance Function, in excess of five years to go from being ready for Cloud transition to realising this change. The most ambitious and leading organisations still take three. This is still too slow, especially factoring in a similar duration it takes to establish a robust business case for such a transition. Over the next three to four months we’ll set out the acceleration of use cases and benefits of investing in cloud based finance infrastructure, how this compares to the continued prevalence of specialist finance systems on-premise, and how modern cloud offerings from providers such AWS and others form the toolkits to support efficient transition.

“A well executed cloud programme can mean a 10-15% reduction in the long term IT spend. But there’s a short term challenge to overcome first. Increased use of cloud apps and infrastructure introduces complexity to an organisation’s landscape, making costs much more difficult to monitor and manage if the journey has not been clearly mapped out and anticipated.”

Paul Groom, Cloud architecture and data engineering specialist, PwC UK

of companies have yet to realise substantial value from their cloud investments

of cloud spend is wasted in typical mid to large organisations over the lifetime of cloud adoption

of CIOs are concerned of the hidden costs of running workloads in the cloud

Sources: PwC, Gartner, Research in Motion, Statista

Conversely, organisations that have clearly identified the operations that can and should be moved to the Cloud as part of their broader transformation agenda, have typically realised the full business value, efficiencies and benefits from the initial adoption to ongoing optimisation. The key is to understand the complexity of your on-premise architecture, data and applications including security requirements and overlaying a view of where your current infrastructure maps to and supports your business priorities/ initiatives.

So where do I begin and what actions do I need to take?

For all organisations, this journey begins by setting out the drivers and values for change. At the outset, it is important to establish what these are, and how they impact Finance and benefit the business. In our experience, the following are the most important factors for the majority of high-growth, large, customer-based financial services organisations:

  • Business model disruption requiring agility to shift rapidly
  • Evolution of Finance Technology - from niche providers to established vendors
  • Unsustainable legacy costs
  • Exponentially growing demand for data driven insights for decision making
  • Workforce of the future and employee expectations
  • More streamlined operating model with better controls

Organisations are able to unlock the benefits of Cloud through a focus on creating a clear plan. Cloud adoption is a low-risk way to experiment with advances in digital and technology to achieve a cost-effective path to one or more outcomes. The PwC white paper “Leading from the front: Redesigning finance for the digital age” outlines how clear ownership of data is the key starting point for a sustained cloud adoption and cloud based transformation in Financial Services.

Event driven transformation use cases graphics

The graphic, sets out several event driven transformation use cases and the sustained benefits that an organisation needs to target.

Source: PwC Finance Effectiveness Benchmark Report, et el.

Next, Chief Technology (CTO) and Data Officers (CDO) need to establish a clear Cloud transformation strategy for the organisation. This should be underpinned by a robust cloud data management framework. Using a proven framework will help assess an organisation’s level of maturity in order to develop and build out a cloud strategy. Alongside this can sit enterprise-wide rules for how data should be collected, stored, transformed, distributed and consumed.

Finance leaders by design or desire, need to grasp this shift to a Cloud-based operating model. They need to reshape their Finance function to be receptive, agile, and even at the forefront of this adoption. It’s important to note that the transition to Cloud does not have to involve a huge capital outflow. Equally, organisations no longer need to commit to a single cloud environment or provider but can effectively leverage a multi-cloud environment that is optimised for Finance and other organisational functions beside.

Finally, while timely insight through relevant data and predictive analytics will remain the focus, the impact of changes to the workforce should not be underestimated either - who are well connected, digitally native and in very high demand. As a result, cloud-based transformation is an imperative for organisations wanting to attract and retain talent.

Contact us

Rumeer Shah

Rumeer Shah

Director, PwC United Kingdom

Tel: +44 (0)7824 084668

Paul Groom

Paul Groom

Cloud architecture and data engineering specialist, PwC United Kingdom

Tel: +44 (0)7483 422043

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